A representative from Vietnam Electricity (EVN) has confirmed that the new two-part electricity pricing mechanism is designed to help businesses optimize power usage and lower production costs.

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Deputy Director Tran Hoai Trang says two-part electricity pricing will begin trial in October 2025. Photo: Construction Newspaper

Speaking at the seminar “Unlocking clean energy: Policy reform and energy flow” hosted by Construction Newspaper on October 8, Tran Hoai Trang, Deputy Director of the Electricity Regulatory Authority (Ministry of Industry and Trade), explained that Vietnam currently uses a single-component retail electricity price, which only charges based on consumption.

While this model is simple and easy to apply, Trang noted that it does not fully reflect the true costs of usage and power transmission.

He illustrated with a practical example: One household registers a capacity of 24 kW but uses it for just one hour, while another registers only 1 kW but uses it continuously for 24 hours. The second household incurs higher operational and transmission costs, yet the current pricing model fails to account for this.

In contrast, the proposed two-part pricing includes both capacity and consumption components. According to Trang, the Ministry is preparing to trial this model with customers who use more than 200,000 kWh per month on average. EVN data shows there are around 7,000 such customers.

The Ministry has instructed EVN to begin the pilot program in October 2025 and conduct a comprehensive assessment before deciding whether to implement the model widely.

However, to ensure successful implementation, Trang emphasized the need for infrastructure readiness. All households and users must be equipped with meters capable of tracking both consumption and capacity values. Only then will the new pricing model deliver meaningful results.

Nguyen Quoc Dung, Head of EVN's Business Division, noted that the two-part pricing method is already in use in many countries, particularly developed nations. This approach, he said, offers the most accurate reflection of electricity system costs and helps balance demand more effectively.

The Prime Minister has already tasked relevant agencies with studying the two-part electricity pricing system, which will consist of a capacity fee and an energy consumption fee, adjusted for different customer segments.

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EVN’s Nguyen Quoc Dung explains the benefits of the two-part electricity pricing model. Photo: Construction Newspaper

Dung said Vietnam’s technical infrastructure is now sufficiently advanced. Smart meters can collect remote data and measure capacity every 30 minutes. The existing transmission infrastructure is also robust, providing the foundation to implement the new model.

In terms of impact, Dung explained that the pilot targets industrial customers with average monthly usage of 200,000 kWh. The trial will begin on paper in October, with adjustments made as necessary. Full implementation is expected in 2026.

He emphasized that this model will encourage businesses to optimize electricity use and reduce expenses.

“In the past, cost-saving meant using less electricity. Now, it’s about using electricity more efficiently - reducing peak demand while maintaining output,” said Dung.

He added that the new pricing mechanism gives customers more choices. By adjusting consumption behaviors and usage patterns to lower peak capacity, they can effectively reduce their bills.

Tam An